Ascential bids to stem Cannes bleeding

Organizers of the Cannes Lions Festival of Creativity this week made their play to placate an industry increasingly frustrated by the costs associated with a week on La Croisette - but, for the PR sector at least, the changes seem positive.

When I interviewed WPP founder and CEO Martin Sorrell in the south of France, he pushed back hard on Cannes. He said he had already reduced the holding company’s headcount by half at this year’s event and that it still costs the network "tens of millions of dollars."

He questioned whether the price gouging associated with Cannes in June meant it was still the right place to have the festival and that it has become too much about making money.

WPP, Omnicom, Publicis, Interpublic Group, and Dentsu Aegis provide a significant amount of Cannes’ awards entry and delegate revenue, so they are clearly key stakeholders. The big tech players including Facebook, Google, Oracle, IBM, and Samsung are now also ubiquitous presences on La Croisette – often with hard-standing physical presences.

They spend significantly less on entries and delegate fees than the marketing services holding companies, although when he guested on The PR Week podcast in July IBM iX’s global leader of agency services Robert Schwartz told us it would be ramping up Cannes Lions award submissions in 2018.

It also hasn’t gone unnoticed that there was a much greater presence this year from consultancies such as McKinsey, Deloitte, and Accenture.

Sorrell, Omnicom CEO John Wren, and Publicis CEO Arthur Sadoun probably reflect that they are the prime funders of an event that is effectively a gateway for swathes of new competitors to target "their" clients.

Negotiations between WPP and Cannes are still underway and Sorrell told me today via email that there has been "no decision as yet" on his holding company’s participation in Cannes 2018. He personally ordered his agencies to cancel all entries and attendees to Ascential’s Eurobest event, taking place in London at the end of this month, when it transpired his requests for WPP firms not to enter the awards had not been complied with fully. He’s clearly in the mood to play hardball on both sides of the equation.

When Cannes committed, before the end of this year’s festival, to convening a consultation group to examine the future of the event it was noticeable that all the initial stakeholders announced were from the client side: Keith Weed, chief marketing and communications officer of Unilever; Marc Pritchard, chief brand officer at Procter & Gamble; Fernando Machado, head of brand marketing at Burger King; Fiona Carter, chief brand officer at AT&T, and Jan Derck van Karnebeek, chief commercial officer at Heineken.

Pritchard said: "We attend Cannes Lions to focus on creativity to drive growth. It's the right time to step back and take a look at the best way forward for Cannes Lions to provide the best possible platform for creativity in our industry, and P&G is ready and willing to help."

Cannes organizers said agency and other stakeholders would be added to the group in due course, though at the time Sorrell told me Ascential wanted "everybody to be part of their committee. It will end up being a ‘camel’ – the process will be cumbersome and unwieldy."

It’s a conundrum for all sides. Agencies know their clients are going to be there in force, and they don’t want to leave them to the ravenous clutches of the management consultancies and tech firms. But they are going to use their leverage to the max to squeeze a better deal out of the Cannes organizers.

Clients are squeezing their agencies harder and harder to cut costs and streamline their processes, but they clearly enjoy being in Cannes and get a lot out of it, usually closely chaperoned by their agency partners.

Ascential wants to ensure it doesn’t kill the goose that laid the golden egg: the Cannes Festival of Creativity brings in an extraordinary amount of money each year that has other media owners looking on jealously. The organizers also note that the archives of PRWeek’s sister brand Campaign show that stories about Cannes being in crisis are a common occurrence over the past 50 years and have been part of the normal ebb and flow of the festival’s history and evolution.

All this resulted in Cannes cutting the event down to five days – everything will now be squeezed into Monday to Friday. It hasn’t been officially confirmed yet, but my understanding is that the PR Lions ceremony will be held on Tuesday night and the Health Lions will be handed out on Monday. There will be a specific PR Lions jury and PR jury president as normal, hopefully allaying fears that the PR Lions would somehow disappear or be diluted.

The 65th Festival of Creativity will now revolve around nine tracks and outdated categories such as Cyber, Integrated, and Promo & Activation Lions have been scrapped – 120 sub-categories have also been removed.

The price of a complete delegate pass has been reduced by €900, fixed price taxis from Nice Airport to Cannes will cost €80, and there are also affordable fixed-price deals with many local restaurants.

Most significantly, perhaps, one entry can only be submitted into six separate Lions categories. This will hopefully go some way toward ending the arms race that sees the same campaigns feature in virtually all of the categories and had effectively made the different Lions classifications redundant from a practical point of view.

The mayor of Cannes has definitely been a part of the consultation process, with accusations of price gouging from local hotels, restaurants, and traders firmly on the agenda. The city saw the Mobile World Congress (then known as 3GSM World) move away from Cannes to Barcelona in 2007 and, given the Festival of Creativity probably contributes more to the local economy even than the Cannes Film Festival, has no appetite for losing another one of its top earners.

More than 650 delegate passes are to be given away free as part of a new Young Lions initiative. There will be a higher profile for the work celebrated at the festival throughout the city. And there will be free Wi-Fi along La Croisette, not just in the official festival and Palais areas.

Contrary to Sorrell’s expressed wishes, the event is clearly destined to stay in the south of France for the foreseeable future, and personally I think it would lose some of its unique character and ability to convene everyone in a relatively small space that facilitates great networking and chance encounters that may go nowhere but could also evolve into significant business relationships.

Transplanting the festival to a big city such as New York or Paris would dilute it and make it just another event. Look at the difficulties the likes of Advertising Week have in building a genuine community feel to its activities.

The reaction to Ascential’s changes seems to have been broadly positive: Publicis says it will be back at the festival in 2019. I imagine WPP and the other holding companies will eventually strike some sort of deal with Cannes organizers to be involved in 2018 – but only after some continued hard bargaining.

* Haymarket, owner of PRWeek, runs Spikes, an ad festival in Asia, as a joint venture with Cannes Lions holding company Ascential.